Bank of Canada's growth forecast at risk as bad data piles up

Manufacturing sales contracted one per cent in August, but beat economists' estimates. Photo by Cole Burston/Bloomberg

Canada’s economic growth in the third quarter could fall short of the Bank of Canada’s forecast given the latest contracting manufacturing sales data, says one economist.

“We continue to expect a weak third quarter, with growth on track to significantly undershoot the Bank (of Canada’s) one per cent forecast,” Alexandra Brown, North America economist at Capital Economics Ltd., said in a note.

Manufacturing sales contracted one per cent in August, according to Statistics Canada data released on Wednesday, although that beat estimates for a 1.5 per cent drop. Their value declined 1.5 per cent for the month.

Manufacturing sales fell in 12 of the 21 subsectors, with